Gold Up on Report China May Slow US Treasury Buys

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The S&P financial index.SPSY was the best performer among the S&P 500's 11 major sectors with a 0.9 percent rise, helped by gains in Berkshire HathawayBRKa.N, JPMorganJPM.N and Wells FargoWFC.N. On Tuesday, the dollar fell 0.39 percent against the yen.

The pan-European STOXX 600 index was down 0.1 per cent while the FTSE edged up 0.2 per cent as a lower sterling helped British dollar earners.

Bloomberg News reported on Wednesday that Chinese officials reviewing the country's vast foreign exchange holdings have recommended slowing or halting purchases of U.S. Treasury bonds amid a less attractive market for them and rising U.S.

However on Thursday, China's State Administration of Foreign Exchange (SAFE) said the report was wrong.

Against the yen, the USA dollar edged higher to fetch 111.83. "The market seems to have been looking for one-sided news to sell the dollar, this week".

Investors grappled with the spreading ripples from a selloff in U.S. Treasury debt, reflecting expectations that higher bond yields will affect everything from asset prices to mortgage rates.

The benchmark USA yield rose seven basis points on Tuesday to top 2.55 per cent for the first time since March, and the Treasury curve steepened the most in over a year, as a looming glut of bond supply from the U.S., the UK, Japan and Germany coincided with a surprise cut in purchases of longdated Japanese government bonds by the Bank of Japan.

On Tuesday, Bill Gross, the high-profile fixed-income investor, tweeted: "Bond bear market confirmed today".

"The US Treasury market is a deep, robust market within the world and so we are confident that our economy, with the economy strengthening, that it will remain a deep, robust market", Mr Malpass told reporters.

"It's entirely possible that China could take measure to rebalance their reserve as they have done in the past", Innes said.

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"I have been expecting rising trade frictions between the United States and China this year".

The strategists question the reliability of the report because, if China really were about to stop buying US Treasuries and made a decision to telegraph it beforehand, then it would hurt itself by driving down the value of the bonds already held on the PBOC's balance sheet.

A separate probe into Chinese intellectual property practices may also conclude as early as this month, Axios reported, and could result in tariffs on the country's consumer-electronics exports.

The Nikkei 225 average in Japan lost 77.77 points, or 0.3%, to 23,710.43, with major exporters, including automakers and technology names, trading lower: Toyota fell 1%, Honda lost 1.9% and Sony shed 0.1% by the end of the day.

Against the yen, the dollar added 0.4 percent to 111.83, after hitting a six-week low of 111.27 yen in the previous session when it skidded 1.1 percent to mark its largest decline in nearly eight months.

Dollars under pressure Vs JPY after the Bank of Japan (BOJ) moved to trim its long-dated government bond purchases this week, was on track to post its biggest 1-day drop Vs JPY in 7 weeks.

"There's no way on earth the Chinese stop buying U.S. Treasuries".

Sterling was down, with decreasing 0.20% to 1.3512.

Brent crude rose 0.5 per cent to $US69.15 per barrel, staying near its highest level since mid 2015.

Pimco, a unit of German insurer Allianz SE, oversaw more than $1.69 trillion in assets under management as of September 30, 2017.

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